The following correction was printed in the Guardian's Corrections and clarifications column, Friday March 23 2007

In the obituary below, we mistakenly said that the "Monico site" in central London housed the Criterion theatre. In fact the theatre is in the Criterion building on the other side of Piccadilly Circus. Lord Forte's son, Sir Rocco Forte, points out that Lord Forte bought Sidgwick and Jackson to return a favour to its previous owner, Jimmy Knapp Fisher, who wished to retire but could not find a buyer, and that, contrary to what we said, his mother never published a book with the company. The only airport catering outside the UK in which Lord Forte's company was involved was at Paris Orly and New York JFK.

Lord (Charles) Forte, who has died aged 98, created a worldwide empire of restaurants and hotels from virtually nothing. Yet within his lifetime it had crumbled and disappeared, making him one of those single-generation businessmen who fail to lay solid enough foundations, or a sound enough succession, to transcend the family heritage.

He will be remembered most for the lengthy but vain (in both senses) battle for control of London's Savoy Hotel, for spreading Little Chef and Happy Eater cafes along the nation's trunk roads, and for his devotion to Margaret Thatcher during her premiership in the 1980s.

The attachment to the Tory leader reflected the values of a self-made man who enjoyed the wealth he created and the access it gave him to distinguished circles. But, like his heroine, he could not bear to give up the reins. When he did, handing over the chairmanship of the Forte empire in 1993 to his son Rocco, it was too late. Within two years, Rocco had succumbed to a £3.8bn takeover by Granada, the TV and leisure group which was, coincidentally, also headed by a man who learned his trade counting the pennies in catering, Gerry Robinson.

Forte had catering in his blood, despite the calculated naffness and mediocrity of most of his businesses. Born in the hillside village of Monforte in Italy, he arrived in the UK with his mother at the age of four, learning his first English in Alloa, Clackmannanshire, where his father ran a cafe - called the Savoy. His education was partly at Alloa academy and Dumfries college as a boarder, and then for two years in Rome, after which the young Forte rejoined his family, who had moved to Weston-super-Mare, where his father was running a cafe with two cousins. Charles's main training at the age of 21 came in Brighton, where he managed the Venetian Lounge for a cousin.

But he was eager to set up on his own, despite the unpromising environment of 1930s England. In the event, he did so with a thoroughness that overcame those circumstances, but which led to the uniform blandness of the mass- market part of his empire.

In his 1986 autobiography, Forte explained the genesis of that first venture, and how he made it a success through a combination of innovation and meticulous attention to detail. The detail was illustrated by his decision to lease the first property in London's Regent Street, after being attracted to the idea of a milk bar by a newspaper article. Forte made a careful study of the number of people passing and entering the shop so that he could calculate whether he could afford the annual rent of £1,000 - a small fortune and a hefty 21-year commitment.

He took the plunge, but his calculations were wrong. The project seemed doomed because he could not get enough people in the door, spending enough money on his offerings. So he did the sums again. He figured that he needed more space but lower costs. This seemingly impossible circle was squared by extending into the shop next door - and sacking three of his staff. The combination of calculation and ruthlessness did the trick, as it did repeatedly for most of the next 60 years.

By 1938, Forte owned five milk bars in London. He then joined forces with Eric Hartwell, who sold kitchen equipment, and their chain of Strand milk bars expanded. A year later, their plans suffered a temporary delay with the outbreak of the second world war. Forte was interned on the Isle of Man because of his Italian nationality, and Hartwell joined the army. But Forte was released three months later to become an adviser to the Ministry of Food. Much to his humiliation, his application for naturalisation - made before the outbreak of war - came through only after it was all over. In 1943 he married Irene Chierico, a Venetian.

The postwar years saw an expansion in the Forte business, especially in the West End of London; he bought the former Lyons tea room off Picadilly Circus, followed by the nearby Monico site, which housed the Criterion theatre. But the transition from cafe proprietor to leisure magnate needed something more. That was provided by a combination of the London property scene and the 1951 Festival of Britain.

Many canny businessmen made fortunes as London property prices soared, and several - such as Max Joseph and Charles Clore - built industrial empires on the back of their property-based acquisitions. Forte was one of them. Fuelled by the profits from catering for the festival, he began buying London hotels, beginning with the Waldorf in 1958. This side of his empire was frequently forgotten amid general disdain for the mass market end of the business, but by 1970 Sir Charles Forte (as he became that year) controlled Britain's biggest hotel chain. And while some were the dismal Forte Posthouses, at the top of the pile were institutions like the Grosvenor House hotel on Park Lane, home to many a grand banquet.

Forte's leap to the top of the hotel ladder came through a cunning takeover of Trust Houses in 1970. This was supposedly a merger, with a carefully balanced board and the name Trust House Forte (subsequently THF). But Forte himself was too sharp for his opposite number, the former Economist editor Lord Crowther. He manoeuvred the former National Coal Board chief and Labour minister Lord Robens on to the board, giving him a majority and turning the merger into a takeover. Once the Trust House directors were ousted, the austere chain, which had Quaker roots, was transformed to maximise its profit potential and extend Forte's hotel presence throughout the country.

The company interests included the Café Royal, Forte's personal favourite acquisition, almost 250 hotels in Britain and Ireland, the Henekey Inns, Quality Inns , Kardomah coffee houses, the Travelodge chain of motels in America, Canada, Mexico and Tahiti, and motorway service stations. It was also in charge of catering at 24 European airports, as well as the Lord Mayor's banquet in London, the Edinburgh festival and the UN in New York. It bought Thorn-EMI's entertainment interests in 1981, which included three West End theatres, the Leicester Square Empire and pier shows at Blackpool Tower. Forte also owned the publishing company Sidgwick and Jackson, a world into which he and his wife made personal forays - with his autobiography and her cookery book.

In 1971, Forte successfully fended off a takeover bid by Allied Breweries, helped by the family's 16% shareholding and a chunk of the House of Lords in the boardroom. But this was his last major success, and Lord Forte (as he became in 1982) sullied his last decade in power with an assault on the hugely prestigious Savoy hotel in the Strand. It would have strengthened his upmarket London hotels to have been able to include Claridges and the Connaught, as well as the Savoy itself. But Sir Hugh Wontner and the Savoy board protected themselves with special shares, which meant they could defeat Forte, even though he managed to buy up a majority of the ordinary shares.

The affair began in 1981 and dragged on throughout the decade. It was a distraction that the group could have done without as it struggled to find a direction and a financial performance that would please its City shareholders.

In 1983 Lord Forte appointed his son as chief executive, but he clung on to the chairmanship - and hence to ultimate power - for another 10 years. By then he was 85, and the group was drifting and hit by recession. When Granada pounced a couple of years later, it had no convincing answers and was swallowed up.

Forte is survived by his wife, son Rocco and five daughters.

· Charles Forte, Baron Forte of Ripley, hotelier and restaurateur, born November 26 1908; died February 28 2007